Pulling back the curtain: the growing trend for transparent pricing

London on The Inside x UK Hospitality #TaxedOut Campaign

When diners look at a menu, all they see are headline numbers: £13.50 for roast chicken, £14 for a cheeseburger, £5 for a pint. The assumption is clear - you pay, the restaurant profits. Yet the reality of modern hospitality, particularly for independents, is far more fragile.

In response to consumer resentment around rising prices, some operators have started opening their books to tell their side of the story. Restaurants and F&B businesses like Fallow and Anges de Sucre, for instance, have built loyal followings not just through their food but through behind-the-scenes posts that explain the real economics of running a restaurant / cake business. Posts would highlight labour in particular, with the time and cost often misunderstood or underestimated by the public. Far from putting diners off, this candour often won them greater trust, helping explain price rises and highlighting the precarious balance of running a food business.

That spirit of openness has now crystallised in a campaign by London on the Inside with UK Hospitality, shared under the hashtag #TaxedOut. By breaking down popular dishes into ingredients, labour, overheads and VAT, the campaign shows just how tight the numbers really are. At The Plimsoll, the £14 Dexter Cheeseburger leaves only 48p profit, a margin of just 3%. At Coqfighter, a Thai roast chicken at £13.50 delivers £1.06 profit (8%), while a seafood dish at Llewelyn’s priced at £32 brings in just £1.37 (4%). Across the examples, the range is roughly 3% to 19%, but most hover at the lower end. Margins that fragile can be wiped out by a tube strike, a spike in energy bills, or a small rise in ingredient costs.

Operators have long known that the financial burden they carry is heavier than most. According to UK Hospitality estimates, as much as 75% of pre-tax profits go back to government once you factor in VAT, National Insurance and business rates. Many operators argue that reform of the rates system should be the priority, since it is not only outdated but punitive for businesses that provide large numbers of jobs and animate local high streets. Business rates in particular are widely seen as disconnected from real-world trading conditions.

The government has hinted at reform before, but to date this has been limited to short-term relief. At present, the small business multiplier is set at 0.499 for 2024/25 and 2025/26, with Retail, Hospitality and Leisure (RHL) Relief softening the blow at 75% in 2024/25 before dropping sharply to 40% in 2025/26. From 2026/27, a new permanent structure will be introduced, with a lower multiplier for RHL properties under £500,000 rateable value, expected to land somewhere in the 0.20–0.45 range according to industry forecasts. That could mean small and mid-sized independents paying substantially less and possible structural relief at last. This will be in part funded by a higher multiplier applied to large properties above £500,000. This means regular restaurant businesses and independents may finally get some breathing room.

VAT remains a major sticking point. UK restaurants face the full 20% VAT rate on meals, while many European peers benefit from reduced rates: 10% in France, 13.5% in Ireland, and lower rates across Italy, Spain and Sweden for food and non-alcoholic drinks consumed in restaurants. The UK’s pandemic rates of 5% then 12.5% provided much needed support and many industry leaders argue that a permanent reduction would help protect a sector that is central to everyday life. This particularly true in a society where dual income households are the norm, and finding time to cook is something of a luxury.

For diners, the transparency of #TaxedOut challenges the outdated idea that restaurants are cashing in. Instead, it shows that most of what they spend goes straight back into wages, rent, utilities and tax. It also helps explain why prices have had to rise, making it easier to win empathy rather than frustration from guests. But the campaign has another purpose - to put pressure on government to recognise hospitality as an industry worth supporting with fairer terms.

Beyond tax, there is also a wider commercial reality at play in the UK's major cities. Post-pandemic, footfall has spread out to residential high streets and local centres, while core business districts remain weaker. You would expect prime central rents to adjust downward in response, but in many areas they have barely shifted. Demand from overseas investors seeking trophy assets, and landlords reluctant to lower yields have kept values propped up. The result is a distorted picture, where many London rents are disproportionate to profit potential and longstanding businesses are being hit with rent reviews that reflect rental appetite rather than trading reality.

Despite the myriad pressures, there are still incredibly well-run, tightly managed businesses generating strong returns. For investors, the logic is simple: if a brand can survive conditions this tough, it has demonstrated resilience that will carry it through almost anything. Hospitality remains a vibrant sector, with opportunities for those who run lean, disciplined models and know how to connect with their customer base. These are the operators attracting capital today, because survival in such a storm is the ultimate proof of strength.

But the wider pressures are undeniable, and as a sector we need to keep lobbying government for meaningful reform. A big part of that is raising public awareness and showing clearly where the money goes. Campaigns like #TaxedOut and the storytelling from operators like Fallow bring diners into the conversation, shifting perceptions, building empathy and putting pressure on policymakers. Because when restaurants close, it isn’t just hospitality that suffers: jobs vanish, high streets weaken, and the wider economy takes the hit. Since the NI increase, an estimated 89,000 hospitality jobs have been lost. A thoughtful combination of business rates reform and targeted VAT relief could turn the tide.